Bob's Gutsy Leadership Blog

Tesla – Incapable of Listening, Learning and Improving

Shares of Tesla have plunged almost 40% this year as investors and analysts’ question whether demand for its cars has peaked. In addition to the drop in deliveries, the company posted one of its largest losses ever in the 1st quarter.

Continuing his propensity for evading reality, the CEO of Tesla has described demand for the Model 3 as “insanely high. The inhibitor is affordability. It’s got nothing to do with desire.” I think he just said: the car is badly overpriced! Being more realistic and factual, one Barklays PLC analyst said: “Model 3 demand has largely stagnated.”

Stepping back and looking at Tesla over the recent years, the following issues seem to continue to plague the carmaker, and should have been noticed and addressed a long time ago:

1.) The Model 3 Pricing Never Got to the Promised Level: Back in 2016 when the CEO launched the Model 3, he promised it would be very affordable, with a $35,000 price tag. Based on this information, hundreds of thousands of folks put down a deposit of $1,000 to get in line. As usual with Tesla, the car was delayed very significantly, and when it did start to roll off the manufacturing line, it had a much higher price tag. In fact, over the past twelve months of Model 3 deliveries, the average selling price has been $57,000.

2.) Tesla Has Consistently Missed Its Sales Promises: For years analysts have been pointing out the chronic inability of Tesla to give an objective and data-based estimate of how many cars it will deliver to customers. Here is the latest example: the Tesla deliveries fell 31% in the 1st quarter of 2019 compared to the last three months of 2018, to about 63,000. But Tesla continues to tell Wall Street that it will deliver 400,000 cars for 2019. When analysts question the feasibility of this, the CEO responded that the company is racing to open its first overseas assembly plant in China, and this will enable the company to deliver as many as 500,000 cars this year! That plant has yet to produce its first car; in fact, Tesla just broke ground for this new facility in January.

3.) Tesla’s So-Called Autopilot Feature Continues to Promise One Thing and Deliver Another: Webster defines autopilot as: a device for automatically navigating a vehicle. In May of 2016, a driver of a Tesla believed that definition and his Tesla ran under a transport truck and sheared off the top of the car, including the driver. Tesla was quick to point out that in using the Tesla autopilot you need to keep your hands on the steering wheel and be alert to take over if the situation demands it. One wonders: why do they continue to call it autopilot? Well, they do, and the accidents keep happening. For example, a duplicate of the famous May, 2016 accident occurred last month, again killing the driver.

The CEO of Tesla seems to be incapable of learning from his experiences and making proper adjustments. Great leaders excel at doing this. As we have noted in past blogs, the current CEO may be a great idea guy, but he sure has a huge blind spot when it comes to continually listening, learning and improving!